Market

Sunday, December 7, 2014

China's Silent Revolution!-Is it a sustainable strategy?

Communist China of to day is poised to take on the US as numero ono power in the world with its rapid industrialization and unbelievable agricultural achievements and no matter what human right activists say about the cruelty of the regime that rules the country, the living standards of people there are leap frogging each year. The GDP has seen a consistent growth of about 8- 9% which no other country in the world could achieve for a century. The strategy of inviting foreign investments into the country with technology transfer preconditions has seen localization of many of them producing goods at costs much less than what is prevalent in other parts of the world. Recent news that China is fine tuning another strategy to mimic what it has done in the manufacturing sector to increase production of agricultural crops dramatically using foreign technologies and foreign companies. Small farmers are being pushed out of their lands and land consolidation is taking place at a frenetic pace. Large agricultural farms using latest equipment and technologies are being set up and in a few years time this country may be the largest supplier of food to the world. Here is a report on this tectonic shift in agricultural front in China and its impact on the food supply in the world.

"As the largest international market for food and agricultural products produces in America, China represents an estimated 20% of farm exports for the U.S. But thanks to the U.S., that lush market is undergoing the biggest transformation in decades — one that will send ripples throughout the global economy. What does this revolution look like? The Chinese government has been gradually pushing the country's agricultural sector toward large-scale farming,as the march toward industrialization has been turbocharged in both government policy and foreign investments. In recent years, the country has replaced small farms with larger plots of land and mega-sized operations. Farmers and entrepreneurs are also receiving industry advice from an unlikely partner: Iowa agribusiness. Across the country, U.S. companies are investing in high-tech hog farms, selling equipment made by Deere & Co. and boosting production of China's largest crop with genetically modified seeds. The results are astonishing. China's total farm output has tripled since 1978, helping slash its hunger rate from 20% of its population in 1990 to 12% today, according to research by the UN Food and Agriculture Organization and the Organization for Economic Cooperation and Development. The pace of the revolution is gaining speed as millions of people leave farming for a job in one of the country's numerous megacities. The government in Beijing is encouraging the mass scale migration as it plans to move 100 million people from rural, agricultural heartlands and into urban areas by 2020. Increasingly, unattended farms are being replaced by U.S.-inspired agricultural innovations: big farms, chemically intensive production, monoculture crop systems and modern technology. "More and more farmers see agriculture as a secondary job. Some farmers no longer attach importance to growing crops as they used to," Minister of Agriculture Han Changfu said in an interview with Xinhua last Friday, the China Times reported. But the government has other, unsaid motives. Not only will mass migration support economic growth, it will also transfer rural land, normally under collective ownership, to government control."

Migration of rural population to urban areas is a phenomenon found in most of the developing countries as small scale agriculture becomes more and more nonviable economically leaving very little option to the rural folks but to migrate to cities seeking better income earning opportunities. In India itself the rural population is coming down rapidly and the urban infrastructure all over the country is literally bursting at its seams due to uncontrolled influx of rural folks. What is alarming is the impact of such a trend on the agricultural front, especially on food production. It is an irony that millions of small land holdings resulting from land fragmentation happening due to successive generational shift cannot adopt modern agricultural practices which only can increase land productivity. As land is a holy cow in the country land consolidation by private players is practically impossible ensuring status quo in the food front. Though one hears about new policies aimed at land consolidation by thrashing some of the archaic laws that prevent any land reforms, nothing seems to be happening at the ground level. India needs to take a lesson out of the Chinese experience and go ahead in transforming small agricultural land holdings into reasonably big entities which can only take up modern technological means to expand food production

significantly in the coming years. V.H.POTTYhttp://vhpotty.blogspot.com/http://foodtechupdates.blogspot.com